Review of the Year 2009 - part two
Plunging car markets, collapsing car companies, famous brands tipping into the abyss, a government-induced small-car spending spree and glimpse at the brave new world of green motoring – all were features of 2009, a year that most, though not all, people in the car business would like to forget.
The two markets most savaged by the global recession were housing and cars, and the massive plunges in car sales, by over 40percent in some markets, soon uncovered the manufacturers with the shakiest business strategies. Suddenly, famous names the world over were in trouble. General Motors, Chrysler, Opel, Saab and even mighty Toyota, which had just toppled GM to become the biggest car-maker in the world, headed for the first loss in its history.
Closer to home, Jaguar Land Rover began ultimately abortive negotiations with the government for loans to tide it over – in the end, Indian owners Tata would raise money elsewhere - while Honda took the unprecedented step of stopping production at its Swindon factory altogether it order to avoid stocks of unwanted cars piling up. Ford put Volvo up for sale – though this was down to ex-Boeing chief Alan Mulally's plan to concentrate efforts solely on Ford's US brands rather than the recession – and Lamborghini, having unveiled a mighty-looking four-door saloon concept called the Estoque, said it would not now be building it. In Britain, the 2010 London motor show was cancelled for lack of support.
April saw the government introduce a scrapping incentive, in which new car buyers qualified for a £2000 discount if they traded in a car over 10 years old. In fact, the government provided only half the £2000, the other half coming from the manufacturers and dealers, which made them squeal some more, but the scheme worked, triggering the sale of some 251,000 cars.
While some of these sales would have occurred anyway, it's likely that well over half would not have happened without this incentive. Curiously, although the government made a half-hearted attempt to present the scheme in eco-wrapping, there was no requirement for buyers to choose a car producing less Co2 than the one they were trading in. So you could trade in Ford Ka for a Porsche Cayenne, and get your incentive.
In the event, small car sales were boosted more than most, a £2000 discount taking a big bite out of the price of an £8000 car, Hyundai's i10 scoring massive sales increases as a result of the scheme, a result that did little to help the country's local producers.